sex.com - your final exam in valuation.

[options]

Originally posted by CoolHost
Please remove this domain from the "Appraisals" section! The domain does not belong to you, and those are the (new) rules!

DomainAppraiser is thinking of buying it. That's why we do this.

 

[CoolHost.com]

"DomainAppraiser is thinking of buying it. That's why we do this."

I'm sorry, but according to the (new) rules one may NOT put up a domain for appraisal UNLESS it is theirs (owned by them)! I agree with this rule, and kindly request that you stop appraising it here in this thread. In fact, the thread should be deleted (though an argument could be made for it to be "grandfathered"). Sorry.
Good Luck.

 

[options]

Originally posted by CoolHost
Sorry.

On next elections I'll vote for you as a new moderator.
That's what we need here. Keep watching.

 

[DomainAppraiser]

C+

Too many assumptions as far as hits & conversion.

Originally posted by bidawinner
Your question is the Valuation of the DOMAIN -SEX.COM- not any past , current websites at SEX.COM

With that in mind.
I would startmy valuation by checking to see if there is even a MARKET for SEX at overture..

http://inventory.overture.com/d/searchinventory/suggestion/

I quickly determine that indeed there is a very large matket of some 2.8 million searchs fro "SEX" every month on oveture alone.

Next I check for a rough estimate of TYPE-IN traffic..the old pros' realize that the road to PROFITABLITY is easier if it is paved with TRAFFIC that dosent need a expensive Search engine marketing campaign.

I check http://inventory.overture.com/d/searchinventory/suggestion/

again this time for "SEX.COM" and I see 212,000 searchs for sex.com ! very impressive ..considering these are the MORONS or uneducated that are using a SEARCH engine instead of their URL address bar foir "SEX.COM" ..

I multiply that number by 4 to represent the roughly an equal amount of searchs acroos all the major SE's..= 848,000 ..I divide that number by 2 to subtract double searchs across the board..(this is a rough number gained by through experiance)

= 424,000 searchs for SEX.COM done in all the se's every month..now keep in mind thats the people who dont understand simply type SEX.COM in your URL browser bar.. I multiply that by 2 to get all the people thet DO understand how to type an address in a URL..(in other words at LEAST twice as many will type SEX.com in their address bar as though that type SEX.com in a search engine) so 424,000 x 2 = 848,000 + 424,000 (the SE people)= 1.27 million "type-ins"
every month world wide.

So that Traffic of 1.27 Milllion is your VALUE..

To Place a dollar amount on the VALUE is a bit more tricky.

Now I am not a porn site builder ..

so I'll have to "wing" it and estimate that you can convert 1 sale for every 100 visitors..at $10 a month= $127,000 month revs from a simple retail access to porn,

Ad rates of 10,000 a month ..10 of those = 100,000

Sale traffic, 20-40 K a month.

and Sex "toy" products maybe another 20K or so..

So that covers the 4 major forms revenue.. so for a very basic setup it should with little trouble bring in 1/4 million every month in revs..

250 X 12 months = 3 Million a year for a BASIC set anyone could set up..

.. I could see a multiple of 2 = 6 million as a HIGH



This is a VALUATION for the domain sex.com based on type-in traffic with a value of $10 per every 100 visitors on current avg visitor/sales ratio (porn industry webmasters can see tell us if I amclose on that number)

I also will point out that Forbes claims the ENTIRE internet sex business is only 1 Billion..

http://www.forbes.com/2001/05/25/0524porn.html

Now keep in mind this valuation is for a 1 year value... multiply that by how many years you think the internet will resemble as it is today AND interest of course.
And of course add a premiunm simply because it is "SEX.COM"
A "vanity" premiunm

 

[DomainAppraiser]

D

This is fair. Would you really turn it down?

Originally posted by Whois-Search
$0

not worth the hassle
the court fees
and the bandwidth bill

 

[DomainAppraiser]

B-

You are missing an ingrediant.

Originally posted by options
As far as I could find, the company is not listed on any exchange.
Even if it was, there are no financial statements and other necessary data which could be used in analyzing the business.
The only data available is their average daily income which comes
at $17,000 before operating expenses, so I would assume $12K-14K average profit or $five million a year (before taxes).
I would also assume their assets are almost non-existent (as cash, inventory, property, contracts, goodwill, etc) as well as liabilities.

What remains is their revenue that proves to be consistent in past years.
Sex.com seems to be underdeveloped, with much place for improvement, so I would say it can be valued at four years its net revenue or $20 million. The uncertainity of internet businesses was
also taken into consideration.

 

[DomainAppraiser]

F--------------------

Are you kidding? Do you really believe that CONTENT IS KING? Very 1999.

By the way, you got an F with 20 minuses. Congrats.

Originally posted by Shiftlock
sex.com is worth about $450 Trillion dollars.

Guys, this is a DOMAIN NAME we're talking about. Yeah, it receives a lot of type-in traffic and is obviously very brandable, but the main ingredient to a successful website is still CONTENT. These valuations in the $100 million range are ridiculous. No domain name is worth that much, because nobody will pay that much for a domain name. If you set up a website on funsexwebsite4u.com and spent the $100 million on promotion you will do far better than blowing $100 million on the domain name.

 

[DomainAppraiser]

C+

Interesting thoughts.

Originally posted by GeorgeK
One would need to know more about their financials to get a good analysis. For $5, I won't dig that much. On a relative basis, though, consider that UDate.com did the following deal:

http://biz.yahoo.com/rc/021219/media_udate_2.html

$150 million in that deal.

Yahoo's market cap stands at $10 billion, see:

http://finance.yahoo.com/q?s=yhoo&d=t

Expedia is at $4 billion:

http://finance.yahoo.com/q?s=EXPE&d=t

Overture is at $1.7 billion:

http://finance.yahoo.com/q?s=over&d=t

Playboy is at $260 million:

http://finance.yahoo.com/q?s=pla&d=t

but with Playboy stock, you inherit the debts of the firm too. Looking at Playboy's revenues,

http://biz.yahoo.com/fin/l/p/pla.html

They're about $70 million per quarter, or say $250 million per year. Can sex.com generate comparable *revenues* (forgetting about costs) than this real-world company, with extensive media holdings (including 50 years of content)? I don't think so. So, this at least provides an upper-bound on what sex.com could ever do in revenues, methinks.

Given the above, I'd give them an "eye-ball" value of $300 million to $600 million. But, with more info as to their operations, one could do a much better analysis.

 

[DomainAppraiser]

B+

NICE!!!

Originally posted by GeorgeK
Make the prize $500 instead of $5, and one would get a much better analysis that would examine NPV, multipliers/risk of comparable cash flows, etc. For $5, time is better spent elsewhere.....

I don't think $600 million is out of the realm of possibility if they did an IPO at this time even. With interest rates so low, and their excellent cash flow and growth prospects, (remember, the multiplier depends on growth too, not just interest rates), just the annuity value of doing nothing but pointing it at PPC search engines forever would be quite a lot (i.e. 30 or 40 multiplier, or more).

If they were to invest in their business smartly, they could probably leverage that URL more effectively than other players. That greater investment return, compared to their competitors, is also worth something.

Suppose they do nothing, and have something like 300,000 to 500,000 eyeballs everyday -- how much is a tv program worth in syndication with that many eye-balls, EVERY DAY, and discounted from now until kingdom come (cum?)? Quite a lot....

 

[bidawinner]

Originally posted by DomainAppraiser
C+

Too many assumptions as far as hits & conversion.

You'll give me the A when you learn the truth about the number of type-ins !

 

[DomainAppraiser]

A-

GEORGE! You've made it into the A range!

Originally posted by GeorgeK
They'd have to sell only a small amount, say 10% of the company, to test the valuation. They can probably get a 30 to 40 multiplier, or higher -- if their revenues are $20 million+ per year, that would push valuation into the range I mentioned.

If they get 15 to 20 cents per unique on 250,000 daily visitors (which is the bid on words like "porn" at Overture), that is:

250,000 * 0.20 * 365 = $18.25 million/yr

So, the cash flow potential, just from doing nada, is huge. I could see valuations above $1 billion or more, if they more effectively monetized their traffic, and also did partner programs, etc. Porn is a huge industry, and isn't going away anytime soon, even with cloning.

 

[DomainAppraiser]

F

Originally posted by CoolHost
Please remove this domain from the "Appraisals" section! The domain does not belong to you, and those are the (new) rules! Thanks.
Good Luck.

 

[bidawinner]

Originally posted by DomainAppraiser
A-

GEORGE! You've made it into the A range!

Are you NUTS !

The entire Internet PORN industry is only worth 1 Billion..

DomainAppraiser..C-

 

[CoolHost.com]

"On next elections I'll vote for you as a new moderator."

LOL. Ok ... thanks, Options!
Good Luck.

 

[DomainAppraiser]

F

Wrong-o.

Originally posted by bidawinner


Are you NUTS !

The entire Internet PORN industry is only worth 1 Billion..

DomainAppraiser..C-

 

[bidawinner]

Originally posted by DomainAppraiser
F

Wrong-o.

now I know you're full out it..
F-

 

[timechange.com]

The plot thickens.

BTW where is the guy that hijacked the domain? In Mexico sipping pina coladas and lounging with mamasitas.

 

[GeorgeK]

The entire porn industry is worth far more than $1 billion. Porn is bigger than mainstream Hollywood.

The only way Pay-per-view makes money, for instance, is on the strength of porn (excluding the occasional Mike Tyson fight, or WWE wresting event).

 

[DomainAppraiser]

Exactly.

You are right on.

Originally posted by GeorgeK
The entire porn industry is worth far more than $1 billion. Porn is bigger than mainstream Hollywood.

The only way Pay-per-view makes money, for instance, is on the strength of porn (excluding the occasional Mike Tyson fight, or WWE wresting event).

 

[GeorgeK]

An old article, with some stats:

http://www.nytimes.com/2001/05/20/magazine/20PORN.html

$10 to $14 billion per YEAR, in the US alone, and those stats are from 1998.

Extrapolating worldwide, that's at least $50 to $60 billion per year, if not more.